In sickness and in wealth

By John Easton
Medical Center Public Affairs

The next time you drive to the store to buy a pack of cigarettes or a bottle of Scotch, as you dig deeper into your pocket for change, maybe even a bill, to cover the tax, think of Willard Manning. He'll be thinking of you.

Manning, who came to the University in November as Professor in Health Studies, is interested in the complex relationship between money and health, particularly how health care organization and finance affect health care delivery.

That includes, of course, studies of health insurance arrangements, the impact of managed care and variations between different types of providers. But he is also interested in the economic costs of poor health habits, such as smoking, heavy drinking and lack of exercise, and in evaluating the consequences of economic disincentives to those harmful behaviors.

"Over the last few years, one of the policy issues became 'Do people who smoke and drink pay their own way?' " Manning said. "Should we raise the taxes on alcohol and cigarettes, people were asking, to cover the full costs of their use imposed on the rest of society? That made a nice campaign speech, but, as always, the answers were not nearly so simple."

For example, the costs of smoking to others, in terms of health care expenses and public-funded or group retirement, were largely offset by the fact that smokers tended to die in their 50s and 60s, before they could cash in on Social Security or Medicare.

"This did not provide much comfort for smokers," said Manning, "but, more surprising, the blunt fact of the argument didn't really deter them either." Unfortunately, most smokers get hooked in their early teens, before they are mature enough to consider the long-term costs. The most important determinant of teen smoking is not the price of cigarettes or pubic regulation, Manning said, but the influences of peers and family, especially older siblings.

But financial incentives can still have a considerable impact on smoking, he said, citing the response to a 1989 California initiative that imposed a 25-cent-per-pack increase on cigarettes. Consumption immediately fell by 14 percent, Manning said, and the revenues from the tax were used to finance an ad campaign against smoking, "which gave an added wallop." Although tobacco interests quickly killed the ad campaign, "the experiment showed that a finance-based approach can work even in that short a time."

Manning's other current focus is a large project with the Utah Medicaid program services, comparing capitation with traditional Medicaid coverage for mental health services, and determining the effects of the types of coverage on the health status of patients with schizophrenia.

"We have not yet fully analyzed the data," Manning cautioned, "but there appear to be substantial long-term adverse health consequences and only short-term savings associated with capitated care for this extremely vulnerable population."

Manning, who trained as an economist, came to Chicago from the University of Minnesota's School of Public Health. "I was excited by the prospect of helping build something within the new Health Studies Department at Chicago," he said, "combining the University's existing resources in health economics and statistics with a new emphasis on epidemiology and health. We already have a fabulous core of scholars."

After playing a major role in the federally funded Health Insurance Experiment -- a large-scale study during the 1970s and '80s on how alternative health insurance arrangements affected health care costs and health status -- Manning is concerned about the current unwillingness of state and federal governments to pay attention to academic analysts when developing policy, or to invest in new large-scale research projects like the HIE.

"With the changes in the structure of the health care system," he said, "most of the earlier work is quite dated. We need a solid understanding of how the newer structures work in terms of patients and providers, costs and health consequences."